Corruption in the financial markets is not a new concept. It occurs in not only financial capitals around the world – London, New York, Hong Kong, but also small developing capital market such as Vietnam or Bangladesh and it can have an even larger impact. From adjusting an interest rate, providing a loan, or short-selling a stock, billions of dollars can be stolen without anyone realizing for the better. A pressing question is How does it impact average person’s life?

Financial or capital markets corruption can seriously threaten an economic system’s well-being – and it’s something Vietnam should watch out for. Take the case of borrowing money in Bangladesh. In the early 2000s, nearly 60% of people seeking loans in Bangladesh admitted to giving a bribe to receive a loan.

This additional cost – the bribe – meant that fewer people with sound business ideas were able to access capital. It also meant that those who were willing to pay this bribe were able to receive loans without having the credit history or collateral to back it up. The result is that bad projects got loans – in a sample group of 125 defaulters in the early 2000s, over 78% had used connections to get the loan.  

When financial markets are corrupt, information becomes opaque. This means that insiders gain, and the average investor loses. One example of this came most recently in the blockchain craze. Without proper regulation, like in the stock market,  groups of bad actors would create “pump and dump” schemes. In these fraudulent ploys, a group of investors would create fake positive news surrounding a stock or cryptocurrency coin. They would then invest large amounts, artificially increasing the price. When other investors followed, they would then sell the stock or coin at the high price, “dumping” the value on others. The unwitting investors not involved in the scheme would often lose significant amounts that they invested.

A significant debate in finance and corruption has also been around algorithms’ role in capital markets. In 2013, Michael Lewis came out with a book called Flash Boys which depicted the current state of high-speed trading. For reference, high-speed training is the use of algorithms to buy and sell stocks faster than any human could react. As Lewis argued in his book, this use of high-speed trading is a form of scalping, manipulating the market to benefit high-speed traders at the cost of average investors and shareholders.

In financial circles, the morality of this type of high-speed trading is hotly contested. Many argue that high-speed trading provides a useful “liquidity” to the market. This liquidity makes it easier for people to buy and sell assets. As well, the use of high-speed trading reduces the “spread” or the cost to buy or sell stocks. Others argue that it unfairly advantages certain firms against others.

In each of these examples, the cost of corruption can still feel distant. Why should the average person care about financial corruption and corruption in capital markets?

When the capital market is corrupt, everything else in business slows down. In a 2006 paper on corruption, David Ng of Cornell found that when a market is corrupt, then firms have higher borrowing costs, lower stock valuation, and worse corporate governance. Put simply, everyone – from the stockholder to the consumer – loses when the capital market is corrupt. It becomes harder to do business, so less business happens.

As Vietnam’s stock markets mature, questions around capital market corruption will become front and center. For Vietnam to create a thriving market system, it will need to have a market that is attractive and stable for its top companies. If it does not, then Vietnam’s largest companies will choose to list elsewhere, diverting capital outside of Vietnam.

Sandy Frucher, the Vice-chairman of Nasdaq, has been front and center in the creation and revitalization of ethical capital markets. In 1998, he became the CEO and Chairman of the Philadelphia Stock Exchange. The exchange had previously been going through financial troubles and he revitalized the exchange – increasing revenue growth by 64% and options value growth of 155%. In 2007, the exchange was acquired by Nasdaq for over $690 million USD where he then became the Vice Chairman.

Over the past few decades, Frucher has also been an advisor here in Vietnam. In particular, he helped provide consulting advice for the Ho Chi Minh City Stock Exchange in its earliest days.

On Tuesday, October 15, at 5:30 PM, Sandy Frucher will give a moral series talk on “Corruption in Financial Markets” at Fulbright University Vietnam in District 7. To learn more about what Vietnam should – and shouldn’t – do to tackle corruption in financial markets, please join Fulbright on October 15.

This article uses materials from the panel discussion on STEAM Education in Vietnam, which was organized by Fulbright’s F-Green student club in April 2019 at Fulbright University Vietnam.

Following the success of the first STEAM Talk, F-Green, a student club at Fulbright University Vietnam, organized their second event of the series: a panel discussion on the prospects and drawbacks when implementing STEAM Education in Vietnam.

The discussion was moderated by a Fulbright student with the participation of three prominent speakers: Dr. Bui The Duy – Deputy Minister of Ministry of Science and Technology, Dr. Tran Minh Triet – Assistant Dean of University of Science, and Dr. Ryan Derby-Talbot – Chief Academic Officer (CAO) of Fulbright University Vietnam.

Is STEAM education important?

Dr. Bui The Duy has always been proud of his Mathematics background and that he graduated from Vietnam National University (VNU), the top science school in Vietnam. Deputy Minister Duy’s breadth of accomplishments can hardly be equaled. 

In high school, Duy won the bronze medal at the International Olympiad in Informatics in two consecutive years, 1995 in the Netherlands and 1996 in Hungary. His achievements did not stop there. Duy completed his bachelor’s degree and doctorate just within six years; he was only 26 years old. At 31, Duy became the youngest Associate Professor in Informatics and the Dean of School of Computer Science – University of Engineering and Technology, a member university of VNU. 

Dr. Duy’s success inspires many Vietnamese students to follow his footsteps. It appears that the focus on STEM subjects in Vietnamese high schools is helping students achieve similar success because Vietnamese students have a long tradition of being hugely successful at international science competitions. However, experts think otherwise. 

Dr. Bui The Duy – Deputy Minister of Ministry of Science and Technology

Deputy Minister Duy shared his concern at the event that Vietnamese students, while possessing tangible academic medals, still lack important skills such as creativity and leadership. According to Dr. Duy, the lack of other useful skills makes Vietnamese graduates less competitive in the job market than Western graduates, even in the fields Vietnamese students excel at such as science and technology. 

“In the division of labor, Vietnamese workforce belongs to the most labor-intensive part – the execution phase, which only yields 20% of the total revenue. Those who initiate, create, and advise the solution for the client’s problem receive the other 80% of the revenue while working less hours,” Dr. Duy explained. 

Deputy Minister Duy also stressed that STEM-/STEAM-focused education is vital for a country to thrive further. The question is how we can implement it efficiently. At the moment, Dr. Bui The Duy believes that Vietnam has been left behind in the development race. 

“STEM/STEAM education is an important foundation for Vietnam to step up the game, especially when science and technology is now encompassing various industries in lightning speed,” he emphasized. 

STEAM: What are the risks in new opportunities?

Dr. Ryan Derby-Talbot, Fulbright’s CAO, believes that we should discuss STEAM education both in terms of risks and opportunities. STEAM educated students are the future’s game-changing player in the technology and science fields.

With great impacts, there comes great social responsibility. It is important for STEAM educated students to possess a human-centered mindset to create more opportunities for growth and sustainability. On the other hand, focusing only on technology advancement and neglecting the humanity aspects will pose as risks for the society. 

According to Fulbright’s CAO, STEAM education should not be taught as five individual subjects. The right approach is to use Science, Technology, Engineering, the Arts and Mathematics as access points to teach students different competencies, including critical and creative thinking, collaboration, inquiry, communication, and analytical reasoning. 

The Assistant Dean of University of Science, Dr. Tran Minh Triet, shared that STEAM education has become popular in Vietnam. Yet, there has yet to be a clear teaching method for STEAM in the current school system. Vietnamese teachers come from different academic background and are not properly trained to teach STEM/STEAM as an educational approach. 

While there are still different debates on the implementation of STEAM education, Dr. Triet and Dr. Derby-Talbot shared the same view on the end results. With STEAM education approach, students can become individuals who are not afraid to take risks, engage in experiential learning, be creative and collaborative in forming new ideas or solving problems, and embrace interdisciplinarity. 

“The end results of education are not the grades an open-, growth-mindset and a strong set of skills. This requires teachers to become mentors throughout the learning journey,” Dr. Triet emphasized. 

Dr. Ryan Derby-Talbot – Chief Academic Officer (CAO) of Fulbright University Vietnam

Shifting the old mindset

According to Dr. Derby-Talbot, to successfully implement STEAM education, the educators need to change their mindset on how different subjects should be taught. Instead of presenting new knowledge to students, teachers may use real life problems/questions as antecedents to help students learn a concept. 

This is also an approach that Fulbright faculty are embracing. For example, in the Co-Design Year, Fulbright students had to take the Scientific Inquiry, one of the seven core courses. This course teaches students not only scientific knowledge, but also the way a scientist thinks and solves a scientific problem.

The professors do not provide answers or make students memorize specific formulas; they guide students to find the answers for themselves. This way, students can learn how to navigate through the “mess” and improve their problem-solving skill. 

Dr. Tran Minh Triet – Assistant Dean of University of Science

Dr. Derby-Talbot emphasized that what sets Fulbright apart is experiential learning. Fulbright students learn from real experience by working on real projects. This will help hone their skills and prepare them for future challenges in the work environment. 

“The grades alone cannot fully assess a student’s ability. A project, however, can show different skillsets a student possesses from the idea formulation stage, to the execution stage,” Fulbright’s CAO shared. 

Dr. Bui The Duy also agreed that education should shift from knowledge-based to competencies-based. In fact, the Ministry of Education and Training is exploring different methods to bring STEM/STEAM education into the curriculum, and teach Math and Physics in English, etc.

“STEM/STEAM education is the priority for Vietnam to nurture a young generation who can help Vietnam catch up with the world,” he said. Some universities in Vietnam is experimenting competencies-based approach by introducing a capstone project instead of an end-of-term exam. 

However, grading a project requires more time and effort than grading an exam while faculty’s salary remains the same. Thus, they only apply the capstone project in their curriculum when forced. Dr. Bui The Duy suggested that universities may consider tying the project with research work; this way, faculty may become more engaged. 


Nguyen Huu Phuc Ngan – the host of Panel discussion
(F-Green)

Dr. Bui The Duy also emphasized that we should not treat STEM/STEAM education as a trend. Faculty need to be properly trained to change from knowledge-based teaching to competencies-based teaching. Knowledge and competencies should be interwoven in a way that students can be best prepared for the everchanging world in the future. 

Linh Vu